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Aerospace Dynamics will invest $165,000 in a project that will produce the following cash flows. The cost of capital is 11 percent. (Note that the
Aerospace Dynamics will invest $165,000 in a project that will produce the following cash flows. The cost of capital is 11 percent. (Note that the fourth years cash flow is negative.)
Year | Cash Flow | |||
1 | $ | 58,000 | ||
2 | 65,000 | |||
3 | 62,000 | |||
4 | (59,000 | ) | ||
5 | 125,000 | |||
a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) b. Should the project be undertaken?
yes
no
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